WorksheetsChapter 5 & 6 Economics Study Guide
Total questions: 83
Worksheet time: 2hrs 2mins
What is open-end credit?
Why do unsecured loans often entail higher interest rates?
What widely used kind of credit does the textbook cite as an example of open-end credit?
(a)
What is a loan's collateral?
What are the two parts of a loan?
(a)
What is a loan's term?
What is installment credit?
Which of the following would lenders likely not examine to determine a borrower's credit limit?
income
outstanding bills
length of residence
past credit experience
The two parts of a loan are the:
schedule and interest.
interest and principal.
principal and term.
term and schedule.
The time given to a debtor to pay back his loan is known as the loan.
term
interest
interval
amortization schedule
Who is the Father of Communism?
(a)
What belief is embodied in egalitarian fairness?
What is the most common command approach to the labor/capital ratio? What is its weakness?
From what source do firms ultimately get funds to purchase more real capital?
(a)
What regulates the flow of money from households to businesses via financial markets?
(a)
What is the difference between consumer goods and capital goods?
What are the three questions a nation's economic decision-makers must answer? (Your answers should be phrased as questions.)
What is economic growth?
Name the two primary types of economic growth and explain the difference between them.
How is unemployment defined? Name one reason that people are concerned by high levels of unemployment.
What are the four primary economic objectives of a society?
The public provision of further training or education for the unemployed while they search for jobs is often known as
safety-net egalitarianism.
workfare.
economic leveling.
welfare.
Which of the following is not true of communism as a philosophy?
It regards class conflict as unsolvable.
It can easily be exploited by ambitious men.
It seeks to perfect society by human effort.
It was initially widely rejected in Europe.
Who is the Father of Communism?
Alfred Marshall
Milton Friedman
Adam Smith
Karl Marx
What viewpoint states that each person in a nation has a right to part of the nation's wealth simply by being part of the human race?
libertarian fairness
economic Darwinism
egalitarian fairness
Keynesian economics
The primary goal that drives the market solution to the input question is
satisfying consumer demand.
increasing employment levels.
lowering production costs.
decreasing economic risk.
What is the command solution to the input question?
Policymakers choose the labor/capital ratio.
Governmental leaders decide the consumer goods/capital goods tradeoff.
The interest rate decides the consumer goods/capital goods tradeoff.
Individual firms choose the labor/capital ratio.
From what source do firms get the funds to purchase more real capital?
company profits
budget cuts
consumer savings
fundraisers
What is the central function performed by the market interest rate?
It reflects consumer confidence in the economy.
It forces producers to give in to demand and consumers to profit from supply.
It allows financial markets to profit from economic downturns.
It regulates the flow of money from households to businesses via financial markets.
Which of the following is a capital good?
a book
a house
medicine
a plow
What is the market solution to the output question?
Individual firms determine the labor intensive/capital intensive ratio.
Each individual decides the consumer goods/capital goods tradeoff.
Governmental leaders make only emergency decisions in the consumer goods/capital goods tradeoff.
Governmental committees make all major decisions concerning the labor intensive/capital intensive ratio.
What is meant by the consumer goods/capital goods tradeoff?
The same business cannot produce both capital goods and consumer goods.
Businesses that produce consumer goods cause the production of capital goods to decrease, and vice versa.
Every business must sell its capital goods for consumer goods, and vice versa.
Nations should trade both consumer goods and capital goods internationally.
Which of the following is a consumer good?
an automobile
a tractor
a printing press
a welding machine
Which of the following best qualifies as a period of intensive growth?
America's westward expansion
European colonialism
the Industrial Revolution
the Louisiana Purchase
Which of the following is not one of the four primary economic objectives of a society?
to maintain a low level of unemployment
to preserve a stable price level
to sustain a uniform rate of economic growth
to ensure a fair distribution of income
Which of the following does not immediately result from fluctuations between inflation and deflation?
People cannot make economic forecasts.
A "wait and see" attitude prevails.
Society's economic output slows.
Unemployment rates rise.
Which of the following is the primary economic concern of a society?
how to balance the public budget
how to best achieve its economic goals
how to sustain economic growth
how to acquire more economic resources
What is an appreciating asset?
(a)
What is investment borrowing?
What governmental act prohibits creditors from concealing information about loan conditions?
(a)
Consumption borrowing often springs from what sin?
(a)
Financially speaking, what is the problem with consumption borrowing?
What is consumption borrowing?
Which of the following is not one of the desired characteristics of a good purchased with investment borrowing?
It is very valuable.
It increases in value.
It reduces expenses.
It will produce income in the future.
In one or two sentences, describe the economic system of communism.
In one or two sentences, describe centralized socialism. Teacher Hint: The state is both owner and decision maker in all economic matters. REF: Page 114
What is the term for a government's buying all of the nation's major businesses? If the government later sells these to private stockholders, what would then occur?
(a)
What is the predominant characteristic of social democracy?
Which economic system creates a welfare state in its extreme form?
(a)
List the two books most foundational to the modern economic systems discussed in the text.
(a)
Adam Smith's writings led to what modern economic system?
(a)
Give an example of a public good in America.
Why are public goods sometimes necessary?
In one or two sentences, describe classic liberal capitalism.
In one or two sentences, describe radical capitalism.
What two questions must be answered to decide if an economy is primarily capitalistic or socialistic?
What economic system arose in response to mercantilism? What was the central new idea of this approach?
What constitutes a favorable balance of trade?
According to mercantilism, what is the measure of a nation's wealth?
(a)
Which of the following is not necessary for a communist system?
The government is disbanded.
Factors of production are owned by everyone.
All citizens are employed.
Personal income is voluntarily redistributed.
According to centralized socialism, what is the solution to the workers' problems?
to work harder
to negotiate through unions
to possess the means of production
to cooperate with business owners
Karl Marx saw economic history as characterized primarily by
international struggles.
class struggles.
individual struggles.
political struggles.
In his writings, Karl Marx envisioned which economic system as a stepping stone to a perfect society?
state capitalism
social democracy
centralized socialism
communism
Which of the following books set forth the foundations of centralized socialism?
Capitalism and Freedom
The Wealth of Nations
The Communist Manifesto
Principles of Political Economy
Which of the following is characteristic of a welfare state?
very high taxes
governmental ownership of businesses
economic leveling
laissez-faire economics
In a social democracy, which of the following is most likely to be privately owned?
trucking companies
chocolate manufacturers
airports
hospitals
Which economic system best describes modern America?
radical capitalism
classic liberal capitalism
state capitalism
social democracy
What modern economic system is based on Adam Smith's writings?
communism
radical capitalism
state capitalism
classic liberal capitalism
Which of the following is an example of a public good in America?
highways
banks
telecommunications
air travel
Which of the following is not a function of government according to Adam Smith?
military
courts
public schools
hospitals
What is one significant similarity between radical capitalism and communism?
They have been adopted by many countries.
They both promote greed.
They see no need for government, ideally.
They are based on scriptural principles.
Which of the following is not necessary for radical capitalism to exist?
Private citizens own all factors of production.
The government enforces private ownership.
Private citizens decide the output question.
The economic market is free from interference.
Which of the following was not a major trait of laissez-faire liberalism?
personal responsibility
limited government
profit seeking
fair trade
What did Adam Smith define as the root problem of mercantilism?
its hostile approach to foreign relations
its definition of wealth as money
its neglect of local citizens
its waste of resources on exploration
Adam Smith defined wealth as
items that provide some measure of utility.
having money to buy more than basic supplies.
a nation's average standard of living.
an individual's accumulated savings.
Which of the following is not one of the five points of a mercantilist program?
exploration to gain new resources
domestic manufacturing for export
foreign relations to decrease competition
foreign trading for luxury goods
The favorable balance of trade that mercantilist countries sought to maintain refers to
an equal amount of imports and exports.
a higher amount of imports than exports.
a higher amount of exports than imports.
a growing amount of imports and exports.
Mercantilism measured a nation's wealth primarily by its
level of domestic manufacturing.
reserves of gold and silver.
deep pool of skilled labor.
acquisition of new colonies.
How might a debtor reduce the amount of interest he must pay overall?
What is an amortization schedule?
What is the interest of a loan?
What is the principal of a loan?
(a)
What is an installment loan that requires only one payment?
(a)
